Sometimes ?No Sale? is the Best Deal

You?re not going to know if a deal is good a deal or not if you aren?t managing your sales pipeline using a simple CRM and sales tracking app like Base.

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Cash flow is the lifeline of every small business and generating consistent sales month after month is an ongoing challenge for most small businesses. Many owners struggle with ups and downs and peaks and valleys which makes it difficult to create a consistent cash flow.

As a result, they often accept deals that they shouldn?t.

A few years ago I was working with the owner of a specialty retail store and during one conversation she mentioned that she had one customer who always compared her prices to a competitor in the same mall. She went on to tell me that she always matched the competitor?s price even when it meant she sold the product at cost.

She was convinced that eventually her customer would pay full price because of the service she offered.
Unfortunately, she was grossly mistaken.

You see, she had actually conditioned her customer to never pay full price because he always got the product at the lower price. The owner justified her actions by saying that she would rather get the sale at cost than have her customer go to the competitor.

This is not an uncommon mindset among small business owners.

They are so eager to capture any and every sale that they sometimes fail to think of the implications.

In the case of the store owner, she actually lost money if her overhead costs were factored into the equation. She really should have summoned up the courage to say to her price-focused customer, ?I?m sorry but I can?t match that price? and let the customer buy the product from competitor because he (the customer) was actually costing her money. Since that customer kept returning to her store I suspect that he would have full price if she had stood her ground.

I have also talked to small business owners who offer a significant price break simply to ?get into? a particular company. What they don?t realize is that this behavior sets the tone for future sales and negotiations.

During a sales training workshop I conducted, a participant told me that his company had finally landed a major account?one that he had been courting for the better part of a year. I knew of the account?s reputation of grinding people for the absolute lowest price and asked him if it was worth it. He shrugged and gave me a wry smile as he said, ?We?ll see.?

Here?s my perspective?

If a particular sale does not make good business sense, you should probably turn it down or walk away.

Sometimes it makes sense to accept a deal with thin margins but?and this is a big one?your decision must be very strategic in nature.

If the long-term impact of accepting a low-profit deal will have a positive impact on your overall sales and/or growth, then it makes sense to accept or move forward with it. However, if the outcome is unclear, vague or uncertain, then you need to give it serious thought.

This approach is easy?at least conceptually. However, it can be extremely difficult to apply in the real world especially if you are in the middle of a dry spell or sales slump. I know from personal experience that your ability to walk away from a low-profit sale is extremely difficult when sales are tight.

That?s why I stress to my clients the importance of keeping a full sales pipeline. The more sales opportunities you have in front of you, the less likely you will feel compelled to accept deal that doesn?t make good business sense.

It?s tempting to get the dollars in the bank but if that deal ends up costing you money, you will end up in worse shape. In the long run, if you close a sale but don?t make any money from it, your cash flow will suffer.

Before you agree to a hefty discount in order to capture a sale consider if it makes more sense to walk away and say, ?No thanks.? Sometimes, saying, ?No sale? is t

Kelley Robertson writes for Future Simple's Growth University and is a business expert experienced in helping people master their sales conversations so they can win more business. He conducts sales training workshops and delivers keynote speeches through his company The Robertson Training Group.

Source: http://www.futuresimple.com/blog/sometimes-%E2%80%9Cno-sale%E2%80%9D-is-the-best-deal/

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